MANILA, Philippines—President Gloria Macapagal-Arroyo on Friday said it will be left to the discretion of local officials where the funds freed by her declaration of a state of calamity in Mindanao are to be spent amid warnings from politicians that they could become a source of corruption.

The local government units (LGUs) can spend the 5 percent of their budgets earmarked for calamities “where they choose because they have local autonomy,” Ms Arroyo told reporters in Mactan, Cebu, late Thursday.

Liberal Party presidential candidate Sen. Noynoy Aquino said there should be a strict monitoring of the funds, noting how “this government has shown its propensity to divert funds for political purposes.”

Nacionalista Party (NP) presidential candidate Manuel Villar warned the administration against selective releases and disbursement of funds to “politicians and favored candidates of the administration.

Malacañang couldn’t provide a ballpark figure of the total funds at the disposal of local officials. But the amount is expected to run into billions of pesos, raising concerns that the money could end up in the pockets of officials running in the May elections especially since the procurement process for this equipment would be exempted from bidding.

Ms Arroyo has declared a state of calamity in Mindanao to deal with the crippling power shortages brought about by a month-long drought, a move that will allow cities, towns and provinces to release 5 percent of their budgets to address a calamity, like the current El Niño-induced drought.

The intent is that the local officials will use the funds for the purchase of generators to quickly plug the power shortages in Mindanao where a long dry spell has dried up the water sources of the island’s hydroelectric power plants.

Estrada, Legarda

Other politicians and candidates on Friday warned against abuses that could result from the state of calamity declaration, particularly the danger of the funds being misused.

Deposed President Joseph Estrada, a candidate for president, warned of the country having a repeat of paying for unused electricity contracted from independent power producers during the Ramos administration.

NP vice presidential candidate Loren Legarda said that while the procurement of generators will be exempted from the bidding process, the government should still observe transparency in the disbursement of taxpayers’ money.

Administration Sen. Juan Miguel Zubiri called on the Church, media and nongovernment organizations to help monitor the calamity fund releases of the local officials so to ensure the money “would not be utilized for political purposes.”

“I urge the Church, media and nongovernment organizations to help ensure the calamity funds won’t be abused and that they will go to the victims,” he said.

Presidential Spokesperson Ricardo Saludo said the best safeguard against misuse of the funds for other purposes would be the Commission on Audit (COA).

“This will be subject to COA audit,” he said.

LGU’s role

Ms Arroyo spelled out the role of governors and mayors and the private sector under the state of calamity.

She said the mayors and governors can tap the calamity fund to provide for the immediate needs of their constituents while the private sector will take charge of importing, leasing or renting the generators needed to plug the shortages.

She gave as an example what happened in Zamboanga del Norte Friday. The governor provided a rice subsidy for the drought-affected farmers, over and above the government’s Pantawid Pamilya Program.

“Things like that, they can do that. This is as far as the harvest is concerned,” she said during dinner at the Maribago Bluewater Beach Resort in Mactan.

The President said the release of the calamity fund to the LGUs would not require clearance from the Commission on Elections, noting that the ban on government projects covers only the awarding of contracts.

Private sector’s role

Ms Arroyo said it will be the job of the private sector to import or lease the generators, for which they will be helped with loans from the Development Bank of the Philippines and the Land Bank of the Philippines.

Energy Secretary Reyes earlier said that the LGUs’ calamity fund might be used to procure generators at a cost of P5.5 billion.

Ms Arroyo mulled declaring a power crisis in Mindanao but backtracked after Congress leaders said it would be difficult to muster a quorum for a special session in the middle of an election campaign.

This would have allowed the government to invoke Sec. 71 of the Electric Power Industry Reform Act (Epira) to empower the state generator, the National Power Corp., to buy or lease modular generating sets for Mindanao.

Arroyo’s instructions

The President also instructed Defense Secretary Norberto Gonzales, chair of the National Disaster Coordinating Council, and Energy Secretary Angelo Reyes to adopt several measures to immediately address the power crisis:

Get the Napocor to resolve the issue of how it can get the 5.5-megawatts excess capacity of the Southern Philippines Power Corp. plant in Sarangani;

Resume operations of the 100-MW Iligan diesel power plant owned by the Power Sector Assets and Liabilities Management Corp. (PSALM) and Napocor;

Contract additional power generation, if there’s any, within the franchise area; and

Operate available “embedded” or stand-by generators of industrial consumers to supply additional power to the grid.

She noted that during a previous power shortage this embedded power-generating capacity of the private sector was used but allowing them to connect to the grid.

More orders

Ms Arroyo also ordered the adoption of these additional measures;

Apply automatic deloading, or disconnection of demand, between 6 p.m. and 8 p.m. which are the peak hours;

Schedule manufacturing activities during the off-peak period between 9 p.m. and 5 a.m.;

Advise load consumers to follow the Napocor-recommended level of curtailment; and

Ask consumers to implement energy-conservation measures.

To improve power transmission, Ms Arroyo ordered the speeding up of the repairs on the Agus 2-Kibawe 138-kilovolt power lines 1 and 2, and expedite the commissioning of the Maramag-Bunawan 230-KV backbone project, and completion of the Sangali-Pitogo 138 KV line.

Asked how long the state of calamity would last, Ms Arroyo said: “There’s a continuing assessment. What if the rains come?”

The El Niño Task Force, chaired by the agriculture department, has P1 billion at its disposal to help several provinces address the ill effects of the El Niño.

Zubiri, who is from Bukidnon, said the declaration of a state of calamity in Mindanao was “a band-aid solution to a long-term problem,” but was the “most immediate first aid that we can do at this point.”

Opposition Sen. Aquilino Pimentel said the move “smacks of political expediency.”

“It seems the government is trying to ingratiate itself with the people,” he said.

Philippine National Police Chief Director General Jesus Verzosa welcomed the decision to declare Mindanao under a state of calamity.

He said it could ease the effect of power crisis on the peace and order situation in Mindanao as local governments there would have more funds to spur economic activity.

“This is definitely a welcome development because the additional funds of the local government may be used in our efforts to maintain peace in Mindanao,” Verzosa told reporters while on a visit to Parang, Maguindanao, to meet with Autonomous Region in Muslim Mindanao officials and community leaders about security arrangements for the elections. With reports from Michael Lim Ubac, Christine Avendaño, Norman Bordadora and Marlon Ramos